Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

In an implied agency relationship, the duties of the agent arise from what?

1. Written contracts

2. Explicit instructions

3. Practical actions or words of the principal

4. Verbal agreements

The correct answer is: Practical actions or words of the principal

In an implied agency relationship, the duties of the agent arise from the practical actions or words of the principal. This type of agency does not rely on a formal written contract or explicit instructions but instead is established through the behavior and communication between the parties involved. The principal’s conduct may suggest an understanding or agreement that the agent has the authority to act on their behalf, even if this is not expressly stated. For example, if a property owner consistently allows a real estate agent to show their property and negotiate with potential buyers, this behavior can imply that the agent has been given the authority to represent the owner's interests. The agent then assumes various responsibilities that stem from this implied understanding created by the principal’s actions or statements, reflecting a level of trust and expectation established over time. This contrasts with written contracts and explicit instructions, which define the relationship more formally and clearly. Verbal agreements, while they can indicate a form of agreement, may lack the clarity and evidence provided through actions, making them less reliable for establishing agency responsibilities compared to implied actions.